The Irony of the American Perspective on the Strikes in France

As Eric Olander wrote in an article yesterday, the French ended their annual ritual of a month-long summer vacation with another annual rite of passage – a strike. Over 1 million unionized workers protested the planned proposal to extend the retirement age in France from 60 to 62.

Many Americans are puzzled by the purpose of the demonstrations. While we often stereotype the French as being snobs who look down their noses at us, we scoff at their strikes and demonstrations. We don’t understand the fuss of changing the retirement age and chalk it up as being “French.”

Scan through some of the American news reports that have described the motives behind the government proposals that triggered the strike.

Newsweek: But the truth is that the economic downturn has accelerated France’s pension crisis exponentially, and the French way of life is more unsustainable than ever.

CNN: One of Sarkozy’s top aides said over the weekend that while there is some flexibility on the details, the fundamentals of pension reform must be enacted, since increasing life expectancy increases the financial burden on the pension system.

The Boston Globe: The government says the change to the money-losing pension system is an obligation, given France’s burgeoning deficit and its aging population.

As Americans, we ridicule the protests without seeing the irony of our own situation. Before you laugh at the French… consider these facts.

Retirement age in France is 60. It’s currently 66 in the U.S. (for Social Security purposes).

The 2010 annual deficit of the French government is 8% of GDP, which is well in excess of the European Union limit of 3%. The U.S. annual deficit will be approximately 10% of GDP this year.

France currently has about 3 workers per retiree. Social Security has about the same.

Without reform, the French pension system will have a deficit of nearly $25 billion in 2010 and $57 billion by 2020. Social Security will have a deficit of $41 billion in 2010 and will have a deficit in excess of $100 billion by 2025.

Clearly there are differences in the economies, cultures, governments and pension systems of France and the U.S. However, there is one thing in common. Both face substantial future deficits trying to support a retirement system for an aging population. It’s no laughing matter on either side of the pond.

You may disagree with their reform proposals, but give the French government credit for trying to proactively deal with a burgeoning pension problem and institute some austerity measures to their budget. France is attempting to tackle their problem by raising the retirement age. The U.S. has done little in decades to face its pending Social Security crisis. We may take a different approach than France, but we still need to act. As I wrote in a post last week, raising the Social Security retirement age seems to be common sense.

France has been our ally since the Revolutionary War, but it’s been an awkward relationship. We both tend to have a way of deriding each other. When it comes to pension and government reform, we may find that we laugh and commiserate with, and at, each other.